Ed Brayton is a journalist, commentator and speaker. He is the co-founder and president of 
For the second time in just his first week in office, the Obama administration has contradicted their own (alleged) rules against allowing lobbyists to work on issues that they previously lobbied on. First it was William Lynn, the former Raytheon lobbyist named to the #2 position in the Defense Department, now it's the new chief of staff to Treasury Secretary Timothy Geitner:
Newly installed Treasury Secretary Timothy Geithner issued new rules Tuesday restricting contacts with lobbyists - and then hired one to be his top aide.Mark Patterson, a former advocate for Goldman Sachs, will serve as chief of staff to Geithner as the Treasury Department revamps the Wall Street bailout program that sent an infusion of cash to his former employer.
Patterson's appointment marks the second time in President Barack Obama's first week in office that the administration has had to explain how it's complying with its own ethics rules as it hires a bevy of Washington insiders for administration jobs.
And here come the excuses:
Treasury spokeswoman Stephanie Cutter lauded Patterson's "long history of public service in the U.S. Senate, both as a staff director of the Senate Finance Committee and policy director for the Senate leader."He brings significant expertise to the job of chief of staff and has agreed to a far-reaching ethics pledge to remove any hint of a conflict of interest," she added.
According to that pledge, Patterson will be prohibited for the next two years from participating in Treasury decisions related to Goldman Sachs and the specific issues on which he lobbied.
I'll take transparently silly promises for $1000, Alex. Goldman Sachs is one of the giants of Wall Street. There is virtually nothing the treasury could do outside of ordering lunch that would not have an impact on their profits. Melanie Sloan of Citizens for Ethics and Responsibility in Washington (CREW) asks, "Goldman so permeates the markets, how can you separate them out?"
That is precisely the right question and the answer is that you can't. Goldman Sachs has enormous investments in every sector of the economy. Every single decision that is made that props up virtually any company in any industry is helping Goldman Sachs because it is a virtual certainty that some of their funds include that company's stock. How many exceptions do you get to make to a rule before it ceases to be a rule anymore?
Politico also reveals that there new DOD deputy William Lynn will continue to benefit financially from anything the Pentagon does that helps his former company, defense contractor Raytheon:
Lynn reported earning $369,615 from Raytheon last year as a senior vice president, He also reported 6,000 shares of restricted company stock worth between $500,000 and $1 million that will vest in February - at a time when he would be on the Pentagon payroll.Plus, the statement shows that Lynn's 2008 cash bonus of as much as $250,000 - "pursuant to previously established bonus target formula" - is payable in March.
Additionally, the statement, which pegs most assets only in ranges not precise values, shows Lynn owns "unvested restricted stock" in the company worth between $250,000 and $500,000.
Also, much of Lynn's retirement is tied up with Raytheon, from a 401k plan worth more than $50,000 to a defined benefit plan that will begin paying him $4,320 a month in 2019.
He says that he's going to sell his Raytheon stock, but even if he does so that doesn't mean he won't benefit from pushing contracts to his former employer. After he leaves office, he will almost certainly rejoin the company, perhaps on the board of directors, and that company will be more valuable and the stock options he receives upon rejoining more valuable if they get more contracts from the DOD in the next four years. That is how it is nearly always done.
We've spent the last 8 years complaining, quite rightly, about Dick Cheney getting a huge golden parachute from Haliburton and then joining an administration that gave them billions of dollars in government contracts, many of them of the no-bid variety. We can't stop now just because a Democrat is in office.
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You're right on target with this, Ed. I'm sad to see this promise go by the wayside so frequently so early on, but I will admit that finding qualified administrators without conflicts of interest can be hard to do. It was going to be a hard promise to keep in any case. I'd rather have seen a promise of realistic reform. It's my hope that, even with these lapses, the outright cronyism and profiteering will be limited in this administration. Of course, compared to BushCo, almost anything would look like an improvement, but I'd rather prefer Obama's actions on their own merits rather than by comparison to his predecessor.
Posted by: Ranson | January 30, 2009 9:25 AM
Indeed. In fact, I hope we do our best to hold Obama to a higher standard.
Posted by: Matt | January 30, 2009 9:33 AM
I was hoping to enjoy that new president smell a little longer. But they had to go and order the franks & beans. Oh well, guess I can’t put it off any longer...
Rabble, rabble, rabble!
Posted by: Abby Normal | January 30, 2009 9:49 AM
Quite frankly, I think this rule against lobbyists is more for show than effect, and Obama's violation of it may be an admission of its inappropriateness. Lobbyists get paid the big bucks because they have more talent for: talking to Congresspersons to get them to act on their proposals; and explaining issues to the public in such a way as to bring people to their side. A President who wants to get Congress to support his policies will need both of those talents in huge quantities. If I want legislation to protect our environment, then I'll bloody well need a seasoned lobbyist on environmental issues to get the thing passed.
The problem is not lobbyists; it's spineless Congresspersons who don't have the resources or guts to keep the lobbyists honest.
There will always be a revolving-door effect between policy-makers and the businessmen who sell whatever services the policy-makers buy. The trick is not to close the door; it's to elect officials who can keep things under control.
We've spent the last 8 years complaining, quite rightly, about Dick Cheney getting a huge golden parachute from Haliburton and then joining an administration that gave them billions of dollars in government contracts, many of them of the no-bid variety.
Really? I spent the last 8 years complaining about a fucking incompetent administration, and a fucking useless war; the Halliburton thing was small-potatoes. And besides, that's not Cheney's fault as a lobbyist; that's Cheney's fault as Co-President.
Posted by: Raging Bee | January 30, 2009 10:09 AM
If Obama had not established the conflict of interest rules he did, I doubt we'd be harping about these two appointments. My primary concern is that the response by Obama and his spokespeople to date has been classic red herrings, i.e., when asked why they are breaking their own rules, they respond with how lovely the two candidates are.
Posted by: Michael Heath | January 30, 2009 11:25 AM
Well said, Ed.
The best way to keep lobbyists "honest" (read, harmless) is to not put them in charge of policy! I am really disappointed with the Obama administration on this.
Posted by: Shygetz | January 30, 2009 11:29 AM
I agree with this, but I think that's a sign that Obama made a mistake in establishing those rules - rules one can't follow are a bad thing.
Posted by: Michael Ralston | January 30, 2009 12:01 PM
"...a sign that Obama made a mistake in establishing those rules - rules one can't follow are a bad thing."
Just so. One of the reasons I voted for Obama was my perception that he thinks his plans through before presenting them. The violations of this policy coming to light almost before the ink is dry shows me that this particular policy was at best ill-considered.
I question the Bee's claims that lobbyists are good choices for these posts, too. The logic is reasonable, but the perception of conflict of interest is huge - and perception is fairly important in politics. I think we'd do better to pick less-qualified people with no apparent conflicts instead of the other way round.
Posted by: BobApril | January 30, 2009 1:26 PM
I'm not surprised. With so much inbreeding in Washington keeping this pledge would be impossible. Anyone qualified to do any of these jobs will have been a lobbyist or worked for those whom the position deals with.
It was a stupid pledge to make. Obama is a newb, a well meaning super intelligent newb.
Posted by: Ian | January 30, 2009 2:27 PM
Ian,
You seem to understand it was a bad pledge. Do you have more experience in high elective office than Obama? Why is that he missed what you see, given that he is "super intelligent?"
Posted by: heddle | January 30, 2009 2:32 PM
I have not yet seen enough evidence on why this process failed so quickly in order to make any judgments beyond the fact the Obama Administration is failing in their response to the public on why they circumvented their own policy, twice. His team has shown the ability to game-plan out policy prior to committing to it, so why not in these cases?
One reason I voted for Obama was my perception that he cared about process and was good at it, a factor I consider more important than policy positions when it comes to predicting success. In fact I can think of no presidential candidate I ever considered who merited that reputation with the possible exception of Ross Perot, who I regretfully voted for in '92.
Posted by: Michael Heath | January 30, 2009 3:18 PM
Posted by: Taz | January 30, 2009 3:26 PM
I would think an inflexible rule is as bad as no rules at all.
Were these good picks or bad? Were they chosen because they were lobbyists, or despite the fact that they were lobbyists?
What were, actually, Obama's rules on former lobbyists? None under any circumstances? Only after careful vetting? Only in extraordinariy circumstances? No as a rule of thumb? No as an unbreakable rule?
One thing I've picked up about following politics is that 99% of news doesn't bother with the important detail.
Just to make up an example: Let's make up a lobbyist -- one for the EFF who was asked to lobby for the EFF because of his thorough knowledge and understanding of issues of freedom, censorship, and the internet. He's knowledgeable, in favor of open access and net neutrality, and an expert in the field.
Should he be left on the wayside because he lobbied for an interest group? What if he'd done the exact same lobbying for Google, instead?
I'd like to see the actual ethics guidelines for this, not the brief summary news reports tend to give. If it was "Never under any circumstances" then I'd smack him twice -- once for generating a rule that had no flexibility and was certain to cost him qualified individuals, and second for violating it.
If it was more "Not without extra scrutiny or assurances or concurrance from X" or something like that, well -- I'd want to know if both these hires fit the conditions for allowing a recent lobbyist into an executive position.
Posted by: Morat20 | January 30, 2009 5:19 PM
I'll admit to being a little conflicted on this issue, though I agree 100% with Michael Heath's first post. While I salute Ed for criticizing Obama (even though it's exactly what I expected from Ed, considering his extremely good track record of non-partisanship), and strongly hope that people will keep commenting on this issue, and any others that might/will pop up in the future, in the hopes of keeping them as rare as possible, I also feel that having a rule like this is a vast improvement over not having one, even if it does come with a few exceptions.
Question: I seem to recall reading that Obama's ethics rules include a provision that bans everyone who serves in his administration from taking jobs in the private sector that're linked to their current jobs and duties, at least until Obama is no longer in office; can anyone confirm or deny that? And does anyone know if William Lynn and Mark Patterson are exempted from that provision as well, if it does exist?If my memory hasn't failed me on this, and these two are not exempted, that would mitigate some of my worries, at least.
Posted by: Kaerion | January 30, 2009 6:20 PM
I am glad to have found Ed Brayton's column, which is honest and right on.
And on cursory reading, I am amazed at some of the comments trying to excuse Obama for what he's doing.
One line of thinking is that Obama is a super-intelligent newbie who just happens to have been caught by his own bad rule. A more honest interpretation is that he is a super-intelligent politician who knows exactly what he's doing, and how to say one thing for public consumption and then do another. Seriously, were there not any other qualified candidates for this job that wouldn't violate Obama's supposed pledge?
And I'm even more stunned that some who posted don't understand why hiring lobbyists to run government is a bad thing. Yes, they have experience talking to members of Congress - and getting them to do what corporations want them to do. The one constant theme in the Bush administration was the intent of the inside players to get rich off the process, from war to environmental destruction to financial deregulation. And Goldman Sachs is at the top of the list of inside players, and have been making money hand over fist the whole way. Do you want government to serve corporate interests, or the people's interests?
This makes me think of another interesting contradiction - how the "anti-war" Obama didn't consider a single person who voted against the Iraq war for any of his top security positions.
Meet the new boss, same as the old boss?
Posted by: Gordon Clark | January 31, 2009 12:10 AM
Gordon: The skills required for a good member of the administration and the skills required for being a good lobbyist are highly correlated, and aren't that well correlated with other things.
It WILL be hard to find people who haven't worked as a lobbyist who will be good administration members, which is why I stand by my claim that this rule was a mistake.
We've seen lobbyists in most past administrations, and it was not a significant problem until Bush, which indicates that the problem was Bush and the way he ran his administration, not inherently lobbyists.
(Now, yes, there ARE problems with lobbyists, but the alternatives are not simple.)
Posted by: Michael Ralston | January 31, 2009 5:36 AM
By your own logic, Goldman Sachs so thoroughly permeates the market that nobody who has been involved with the private sector could be free of association with them. Anybody who has gotten their hands dirty will have dirty hands. It's the promise, like many of Obama's promises, that was absurd from the beginning.
Consider what happens when you hire people who do have clean hands in the industry. You don't want somebody like Michael "Heck of a Job" Brown, who had no experience.
Hypocrisy? Sure. But a certain amount of dissonance is to be expected between his idyllic promises and the day-to-day operation of his administration. I'm no supporter of Barack Obama, but if this is as bad as it gets, then consider me satisfied.
After all, there's puffery and then there's fraud. I consider this puffery. At least this regime feels accountable enough to offer lame excuses (a refreshing alternative to the previous regime).
Posted by: Wikitopian | January 31, 2009 1:28 PM
Perhaps we should focus on big picture Patterson's service in Government far outweighs his tenure at Goldman. If he is the person Geitner has most confidence in than he is the person for the job. Let's give the administration some breathing room. It's the spirit not the letter of the law
Posted by: Marianne Hayes | January 31, 2009 4:31 PM
Perhaps we should focus on big picture Patterson's service in Government far outweighs his tenure at Goldman. If he is the person Geitner has most confidence in than he is the person for the job. Let's give the administration some breathing room. It's the spirit not the letter of the law
Posted by: Marianne Hayes | January 31, 2009 4:31 PM